DEC: Driller pollutes stream

Pennsylvania runoff taints water in New York's Allegany State Park

Updated 12:33 am, Wednesday, January 25, 2012

ALBANY — The state wants to fine a Buffalo-area natural gas drilling company $187,500 for polluting a trout creek in the state's largest park.

The alleged problem: runoff from roads surrounding the firm's hydrofracking wells across the border in Pennsylvania.

The state Department of Environmental Conservation moved Tuesday to fine U.S. Energy, of suburban Amherst, saying the company had repeatedly fouled Yeager Creek in Allegany State Park since August 2010.

The proposed fine includes a $75,000 penalty against the company for allegedly failing to fix surface drainage problems around its gas wells in Allegheny National Forest in McKean County, Pa., despite signing two agreements in 2010 and 2011 with DEC to do so.

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The wells use low-volume hydrofracking, and are of the less extensive vertical type, rather than horizontal, according to DEC. Hydrofracking relies on a high-pressure mix of chemicals, sand and water pumped into deep underground rock formations to free trapped natural gas. DEC is studying whether to allow the technique in the state.

The proposed fines stem from what DEC views as U.S. Energy's inadequate or missing controls to prevent storms from washing mud and other materials from heavily used mining roads into the brook that flows north into New York and the park.

Investigations by DEC and the state Office of Parks, Recreation and Historic Preservation — conducted in August 2010, November 2010, September and December 2011, and this month — found the company's roads upstream were covered in thick, heavy mud that was being washed by rain into the brook.

Located about 60 miles southeast of Buffalo, the 65,000-acre park attracts more than 1.8 million visitors annually. A designated trout stream, Yeager Brook was rendered "cloudy and gray" because of the pollution, according to DEC.

"This enforcement action should provide a strong deterrent to other oil and gas well operators in New York and neighboring states whose operations impact New York's natural resources," said DEC Deputy Commissioner and General Counsel Steven Russo. "We will not allow U.S. Energy's actions in Pennsylvania to negatively impact New York's waters."

The company denied any problems and will dispute the fine, spokesman William Albert said.

"The wells are in Pennsylvania and the company's operations are regulated there by the (Pennsylvania) Department of Environmental Protection. U.S. Energy is not aware of any issues at the wells in question," he said. "We were told that DEC alerted Pennsylvania's DEP of its concerns. DEP asked DEC for a meeting to discuss DEC's concerns for validation, but DEC never responded back to DEP. U.S. Energy intends to vigorously defend itself."

The company signed agreements with DEC in December 2010 and August 2011 for polluting Yeager Brook, and was fined $3,500. Another $8,000 fine was imposed but would be suspended if the company fixed the issues.

In July 2009, Pennsylvania environmental officials fined the company $200,000 and halted drilling at most of its wells because of hundreds of "persistent and repeated" environmental violations over the previous two years.

At that time, Pennsylvania DEP Regional Director Kelly Burch said U.S. Energy showed a "pattern of behavior that displays disregard for environmental regulations and laws, the consequences being the contamination of water and soil." The state allowed U.S. Energy to resume full operation in October 2010 after correcting the violations.

In 2008, U.S. Energy also sought state permission to drill five test wells in Allegany State Park on land where it claimed to control private mineral rights spread over 3,000 acres. The state rebuffed the effort, demanding that the company prove it actually held those rights. U.S. Energy and the state wrangled over legal records for more than a year before the company dropped its effort.